Adjusting entries and account classification.

Part A. Prepare adjusting journal entries at year end, December 31, 2020, based on the following supplemental information.

1. The equipment has a useful life of 18 years with no salvage value. (Straight-line method being used.)

2. Interest accrued on the bonds payable is $30,000 as of 12/31/20.

3. Unexpired insurance at 12/31/20 is $16,000.

4. The rent payment of $240,000 covered the six months from November 30, 2020 through May

   31, 2021.

5. Salaries and wages earned but unpaid at 12/31/20, $44,000.

Part B. Indicate the proper balance sheet classification of each of the 17 numbered accounts in the 12/31/20 trial balance before adjustments by placing appropriate numbers after each of the following classifications. If the account title would appear on the income statement, do not put the number in any of the classifications.

1. Current assets

2. Property, plant, and equipment

3. Current liabilities

4. Long-term liabilities

5. Stockholders' equity

Selected amounts from Happy Company's trial balance of 12/31/20 appear below: 1. Accounts Payable $ 320,000 2. Accounts Receivable 300,000 3. Accumulated Depreciation Equipment 400,000 4. Allowance for Doubtful Accounts 40,000 5. Bonds Payable 1,000,000 6. Cash 300,000 7. Common Stock 120,000 8. Equipment 1,440,000 9. Insurance Expense 60,000 10. Interest Expense 20,000 11. Merchandise Inventory 600,000 12. Notes Payable (due 6/1/21) 400,000 13. Prepaid Rent 240,000 14. Retained Earnings 260,000 15. Salaries and Wages Expense 656,000 (All of the above accounts have their standard or normal debit or credit balance.)